Thursday, 27 May 2010

Imports rise highest in 7 years

March’s 38.9% growth a reversal of 36.2% slump 12 months ago

PHILIPPINE IMPORTS climbed by 38.9% to $4.54 billion in March -- the strongest in seven years -- on the back of double-digit upticks for key products, the government yesterday reported.

The result for the month was a turnaround from the 36.2% slump recorded a year earlier, and was the highest since January 2003.

Growth for the first quarter was 32.7% to $12.73 billion, the National Statistics Office (NSO) reported, also a reversal from the 34.3% dip notched during the same period in 2009.

Electronic products, which accounted for a third of the total import bill, rose by 35.4% to $1.5 billion in March, reversing last year’s 41% fall.

Other top imports that recorded double-digit gains were oil, cereals and cereal preparations, transport equipment, industrial machinery and equipment, iron and steel, plastic, telecommunication equipment and electrical machinery, and chemicals.

A Cabinet official said the results signaled a revival in consumer demand and were a testament to a rebound in exports, even as sentiment among economists was mixed.

"With robust gains from all major commodity groups, particularly capital goods, consumer goods, and mineral fuels and lubricants, inward shipments for the month recorded the highest year-on-year increase since January 2003," Acting Socioeconomic Planning Secretary Augusto B. Santos said in a statement.

Bernardo M. Villegas, an economist at the University of Asia and the Pacific , said the latest import data tracked the double-digit growth in exports and reflected a "strong" economy amid global recovery.

Exports surged by 43.8% in March.

"Most of our exports are import-dependent so there should be no surprise on why the import figure is picking up especially now that exports are showing strength due to increased demand from trading partners," Mr. Villegas said in a telephone interview.

HSBC economist Frederick M. Neumann, meanwhile, said a drop in world oil prices would cut second quarter imports growth.

"Imports in March was strong, driven by higher exports and oil prices but it must decline in the second quarter due to lower oil prices," said Mr. Neumann, who expects imports to grow by 14.9% this year, in a separate phone interview.

Former Budget Secretary Benjamin E. Diokno, for his part, dismissed the gains as driven merely by election spending and a "low base" effect from last year.

He raised the possibility of imports topping exports, which he said translates to a wider trade gap that would hurt economic growth.

"The economy is not yet back to its pre-crisis level," Mr. Diokno, an economist at the University of the Philippines, said.

Semiconductor and Electronics Industries in the Philippines, Inc. President Ernesto B. Santiago confirmed increased purchases of raw materials for the manufacturing of electronic products amid improving global demand.

"Imports should be picking up as we are now even looking at revising our current 20% growth forecast for electronic exports to probably within the range 20-25%," Mr. Santiago said.

Japan was the country’s biggest source of merchandise in March, accounting for a 13.2% share of the total import bill.

Mr. Santos said the Philippines joined its neighbors Indonesia, China, Taiwan and Thailand in reporting double-digit growth in imports in March.

Economists, however, were of the consensus that imports growth would slow in the second semester, although they said the full-year number should fall within the government’s official 11-13% target.

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